Windfall tax for major companies to be introduced in Russia

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Monitoring of the Federal Legislation dated 26.08.2003

Order of the Government of the Russian Federation No. 1165-r of August 15, 2003

Endorses the forecast plan (program) of privatisation of the federal property for the year 2004 and the main directions of privatisation of the federal property until 2006.
In 2004-2006, the privatisation will include federal property not used to ensure the functions and tasks of the state.
In 2004, it is suggested to put out for tenders all federal packets of stocks with amount not greater than 25% of the registered capital of the appropriate joint-stock company, except for the packets of stocks of the joint-stock companies of the power supply industry (before termination of the reorganisation of the Russian joint-stock company Joint Power-Supply Systems of Russia), gas-supply industry, as well as the joint-stock companies of strategic destination.
In 2005, the Russian Federation is expected to terminate its participation in the joint-stock companies of the gas-supply industry, power-supply construction complex, fishing, construction complex, cinematography, foreign-trade organisations, as well as the joint-stock companies of mechanical engineering (except for the strategic joint-stock companies).
In 2005, it is expected to put out for sale all federal packets of stocks with amount not greater than 50% of the registered capital of the appropriate joint-stock company, except for the packets of stocks of joint-stock companies of strategic destination.
In 2006, the Russian Federation will terminate its participation in the joint-stock companies of civil aviation, public health, chemical, petrochemical and printing industries, geology, fishing, poultry breeding, plant growing, animal breeding, forestry complex, medical industry, as well as terminate conversion into joint-stock companies of the federal state unitary enterprises of the nuclear industry.

Order of the Government of the Russian Federation No. 1163-r of August 15, 2003

Endorses the program of socio-economic development of the Russian Federation for the medium-term perspective (years 2003-2005).
The reform of the tax system in the medium-term period will include:
- improvement of administration of individual taxes (VAT and the uniform social tax first and foremost), reduction of the tax administration burden (including the tax record keeping);
- improvement of the system of property taxes;
- revision of the list of the regional and local taxes and fees, including the abolishment of the tied fees for police maintenance, fees from dog owners, fees for vehicle parking;
- reduction from 2005 of the tax burden for the labour remuneration fund at the expense of the reduction of the efficient rate of the uniform social tax (under the condition of maintaining the financial stability of the pension system).
One of the priority directions is also the reform of the banking system. To implement this direction it is planned to:
- enhance from the year 2005 the requirements of the Bank of Russia to the capital sufficiency figure of credit organisations;
- simplify the procedure of reorganisation of credit organisations in the form of a merger, incorporation and transformation;
- specify the requirements and terms of crediting of interconnected parties;
- regulate legislatively syndicated credits to clearly distribute the liability, tax consequences and risks for syndicate participants;
- develop the system of disclosing of information on fair execution by the borrowers of obligations to banks (credit bureaus);
- create the system of registration of bails for any type of property and property rights;
- introduce amendments to the Civil Code of the Russian Federation envisaging opportunities of early exaction of fixed-term deposits only in cases directly specified in the contract.

Decision of the Federal Commission for Securities Market No. 03-33/ps of July 16, 2003 on the Endorsement of the Regulation on the Procedure and Time Limits of Storage of the Documents of Joint-Stock Companies

Specifies the procedure and time limits for storage of documents of joint-stock companies, including the procedure of destruction of the expired documents. The mentioned documents include decisions on the issue (additional issue) of securities, amendments to these decisions, emission prospectuses, registered reports of the results of issue (additional issue) of securities, lists of the company documents handed over for permanent storage to the company archive, acts of document selection for destruction.
An expert commission is created in the company to organise and carry out expert evaluation of the validity of the documents formed in the course of the company operation, select them for further storage or destruction.
Registered in the Ministry of Justice of the Russian Federation on August 21, 2003. Reg. No. 4994.

Letter of the Department of the Currency Control of the Ministry of Finance of the Russian Federation No. 15-01-27/834 of August 6, 2003

Explains the issue of handing out by the authorised banks opening accounts to residents of certificates of the absence of overdue debts in receipts from export operations and obligatory sale of its part, as well as of the violations of the currency legislation of the Russian Federation.
Reports that the certificate for the Ministry of Finance of the Russian Federation must indicate only information on the registered by the authorised bank violations of the currency legislation of the Russian Federation, including all open deal certificates drawn up by the resident in the authorised bank.

Letter of the Department of the Methodology of Accounting Work of the Ministry of Finance of the Russian Federation No. 16-00-12/29 of August 5, 2003

Printing activities, activities in the making of the strict-reporting forms (without protection against forgery) and activities in selling these blank forms is not subject to licensing.
Since strict-reporting forms are printing industry items, the typing of the series numbers on the strict-reporting documents must be made using printing industry methods. Indication on the printed items of information of the printing house making the blank forms is an obligatory requisite identifying the maker of the blank forms.

Letter of the Ministry of Finance of the Russian Federation No. 16-00-14/247 of August 5, 2003

Since the amount of the registered capital of the state and municipal unitary enterprises is specified in the charter, reception of fixed assets on the economic management or operative control basis in excess of the registered capital is recorded in accounting work on the debit of Account 08 "Investments in the Assets out of Circulation" in correspondence with the credit of Account 75 "Payments to Founders", separate subaccount, debit of Account 75 "Payments to Founders" in correspondence with the credit of Account 84 "Undistributed Profits (Uncovered Losses)", debit of Account 01 "Fixed Assets" in correspondence with the credit of Account 08 "Investments in Assets out of Circulation".

Letter of the Ministry of Finance of the Russian Federation No. 16-00-14/243i of July 31, 2003

Explains that amortisation is not accrued for the objects of fixed assets of non-commercial organisations purchased at the expense of resources obtained from entrepreneurial activities.
The mentioned fixed assets are recorded in accounting work when the object is entered in the records on the debit of Account 01 "Fixed Assets" in correspondence with the credit of Account 08 "Investments in Assets out of Circulation" and the debit of Account 86 "Tied Financing" in correspondence with the credit of Account 83 "Additional Capital".

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